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Stocks advance in short session

But at best, Black Friday's tally prompts cautious optimism.

NEW YORK - Stocks rose as investors capped a capricious week by engaging in a bit of Black Friday bargain hunting while awaiting an enduring word of how retailers might fare during what is expected to be a tough holiday shopping season.

Friday's holiday-shortened session ended three hours early and followed fractious trading that on Wednesday saw the Dow Jones industrial average and the Standard & Poor's 500 index give up more than 1.5 percent. The S&P's climb Friday put the index back into positive territory for the year.

The day's gains weren't enough to reverse losses for the week, however, and observers cautioned the session could prove more an aberration than a reversal of recent trends. With many of Wall Street's principal players on vacation, volume was light as is typical on such days.

"While I'd love to celebrate this rally, it is on very thin volume and we have to really wait until next week to get a sense of the true direction of this market," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

Still, he said it's a good sign that stocks didn't extend Wednesday's slide.

"It looks like a little rebound rally," Ablin said. "Maybe the day off for Thanksgiving enabled investors to reflect that maybe the bottom isn't falling out of the economy."

The Dow rose 181.84, or 1.42 percent, to 12,980.88, finishing at the highs of the session rather than losing steam in the final minutes as has occurred often in recent weeks.

Broader stock indicators also rose. The Standard & Poor's 500 index advanced 23.93, or 1.69 percent, to 1,440.70, and the Nasdaq composite index rose 34.45, or 1.34 percent, to 2,596.60.

For the week, the Dow lost 1.49 percent, the S&P 1.24 percent and the Nasdaq 1.54 percent.

With no major economic data arriving and not much in the way of corporate news, some investors appeared to make some pro forma trades and search for any insights into the health of the economy, particularly with the arrival of Black Friday, the unofficial kickoff of the holiday shopping season.

Black Friday may have gotten the season off to a good beginning: many retailers reported, anecdotally, seeing more people than last year taking advantage of the day's deep discounts.

One day does not a season make, however. Investors want to see the euphoria of the first shopping day of the season persist all the way until Dec. 25, and beyond, before they place a bet on how Christmas went.

"Consumer spending is always something we pay attention to, we want to see higher traffic on Black Friday," said Ryan Larson, senior equity trader at Voyageur Asset Management. "But, results from just one day isn't going to do it - the follow-through is more important from a trading standpoint."

Oil prices, which flirted with $100 per barrel earlier in the week, gained as heating oil rose amid concerns about tightening supplies. Light, sweet crude for January delivery advanced 89 cents to settle at $98.18 per barrel on the New York Mercantile Exchange.

[Last modified November 23, 2007, 22:37:05]